Indigenous contractors take Rio to account

IS it propaganda or pedantry?

Trying to find the common ground between the Pilbara’s biggest miner and a services lobby group representing 16 mainly small businesses in the region is tough.

Late last year, Pilbara Aboriginal Contractors Association (then) chairman Barry Taylor claimed that, by spending around $80 million a year on contracts with indigenous companies, its major sponsor, BHP Billiton, was single-handedly keeping its members in business while other heavyweights in the region failed to pull their weight.

BHP’s rival, and soon to be iron ore mining partner Rio Tinto, did not take that claim lying down.

In front of a high-powered audience of Western Australia’s business elite, key members of the North West community and political leaders Colin Barnett and Brendon Grylls, Rio Tinto’s Australian CEO Sam Walsh said his company’s spending on indigenous contractors was about $110 million per year.

Soon after, Rio Tinto revealed a $200 million contract awarded to a joint venture between native title holders Eastern Guruma and mining services group NRW to build and operate a mine at its Western Turner Syncline deposit near Tom Price.

“The four-year contract has been designed to increase Eastern Guruma equity in the joint venture from 25 per cent to 35 per cent as the group builds capacity in mining services,” Rio Tinto said.

It also noted that, of the $110 million it spends each year on indigenous contractors in the Pilbara, nearly $50 million was directed to companies affiliated with PACA.

But PACA has taken issue with that figure, claiming it is inflated.

PACA general manager Tony Wiltshire said Rio Tinto had spent around $34 million, well short of the claimed $50 million but still close to half what BHP was spending just with PACA members.

Like some of his members, Mr Wiltshire doesn’t regard the win by the Eastern Guruma-NRW joint venture as optimal, believing that capacity building of the Aboriginal business sector would have been better served by a group like Ngarda Civil & Mining taking the contract because it would have sub-contracted to other PACA members.

Rio Tinto Iron Ore managing director Pilbara mining operations Greg Lilleyman said his company tried to reach the best outcomes taking into account the different ways native title holders wanted to do business.

“We don’t try to dictate how these groups set themselves up and who they should work with,” he said.

Mr Lilleyman said there was political infighting among the different groups with regard to which approach to take